Washington, DC (BBN)- The World Bank on Wednesday launched a US$ 1.5 billion global bond issue, its first US$ benchmark since March 2006.
This transaction responds to global investor demand for the highest quality fixed-income investments, against the backdrop of extreme market volatility, wider swap spreads, and an overall flight to quality, a World Bank press statement said.
The bond pays a coupon of 3.5 per cent and has a maturity of 5 years – longer than market participants believed, and recent transactions have suggested, was generally available to even highly-rated issuers.
The breadth and diversity of the order book suggests that many investors have seen the transaction as a welcome opportunity to rebuild the intermediate-maturity segment of their fixed-income portfolios, the World Bank said.
The present transaction is consistent with the World Bank’s long-standing practice of deploying its franchise as an issuer in the international capital markets to offer liquid, well-priced instruments in times of market stress.
This approach has direct benefits for World Bank member countries, as well, since this cooperative institution is able to fund its activities as a provider of financial services for its members on highly attractive terms.
BBN/SI/SS/AD-02October08-2:12 AM (BST)
